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KONE 2016 | SUSTAINABILITY REPORT
SUPPLY CHAIN
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In 2016 KONE had nine production sites for
elevators, escalators and building doors, 10
global distribution centers for elevators, and
five distribution centers for spare parts.
KONE’s supply chain operations cover new
equipment production, modernization, and
spares supply. We also work closely with
selected key material suppliers and logistics
service providers. Approximately 4,700 people
keep KONE’s supply operations running. We
aspire to develop the best supply chain in the
industry.
Quality, responsiveness, and efficiency are
the cornerstones of our supply chain, which
consists of all the actions and processes that
precede the delivery of KONE equipment
to a customer’s site. The chain ends when a
customer accepts installation. Leading up to
this, our job is to ensure that the right items are
delivered to the right places at the right times
throughout all the phases of manufacturing,
distribution, installation, including our
suppliers’ processes.
Our aim to make KONE’s supply chain
the best in the industry requires that we
continuously analyze and fine-tune our
processes. KONE’s supply chain improvement
program, 10x Better Factory continued in
2016. The program aims to further enhance
the quality of our in-house production and
support harmonization of process control
activities in production lines. During 2016
solid and up-to-date control plans were
created for each workstation and critical
standard processes began to be managed by
real-time statistical process control.
To strengthen production quality
competencies staff and key operatives in all
production units have completed specific
eLearning training programs. Furthermore,
each production unit completed many
corrective actions as part of continuous
improvement program to further align their
operations with newly established quality
guidelines.
In 2016, we started the implementation of a
new manufacturing execution system.
AN INDUSTRY-LEADING SUPPLY CHAIN
The system strongly supports operative
production quality improvements.
During the reporting year we invested in
machine tools, replacing those using earlier
hydraulic systems with more advanced electro-
mechanic technology. The new tools are more
environmentally sustainable because in addition
to bringing energy savings, oil is no longer
required in their operation.
In 2016, we opened a new 16,000 square
meter facility in Allen, Texas, US, to house
North Americas’ supply operations. The
facility includes a light manufacturing unit,
major project engineering, research and
development department, and other product
and installation support functions. It also
features a 40-meter tall test tower with six
elevator shafts for evaluating prototypes
and new components before they go into
production.
Responding to customers’ needs
We take customers’ different requirements
into account by adapting our supply chain
to meet their demands. For example, we
collect customer feedback on our quality
performance systematically and analyze it using
Six Sigma tools before taking corrective action.
Additionally, we set targets and monitor key
performance indicators (KPIs) such as the early
failure rate of our products.
At the end of the day, our customers’
opinions on our performance are what
count. According to the global NPI Customer
Loyalty Survey we carry out each year, our
efforts to achieve supply chain excellence
have been succesful, with the 2016 results for
both product quality and installation quality
remaining on a good level.
Better quality and productivity
through learning
We at KONE employ a set of techniques
and tools to improve the productivity and
quality of our operations. By applying Lean
and Six Sigma philosophies, we are able to
reduce waste and control process variation
throughout the entire supply chain as well
as in product and process transitions. We
Each year, KONE delivers over 3.3
million packages from distribution
centers to installation sites, and around
1.3 million packages of spare parts
from distribution centers to customer
sites. 3.3 million packages amount to
a weight of 1,150 million kilograms, or
2.8 million cubic meters in volume.